USD/JPY Falls Short Of 2024 YTD Highs, Intervention Risks & Jan CPI In Focus

USD/JPY spent most of the post Asia close tracking higher on Monday. The pair got to a high of 150.84, so just shy of the 2024 high at 150.89. In early Tuesday Asia Pac trade, we sit near 150.70. Yen lost a little over 0.10% for Monday's session, the third worst performer in the G10 space (behind NZD and AUD).

• The other majors firmed against the USD, to leave the BBDXY down slightly (near 1241.5).
• Yen was weighed by a generally heavily US Tsy backdrop. Yields reversed Asia Pac losses and sit roughly 2-3bps firmer across the benchmarks, led slightly by the front end (2yr to 4.725%). Heavy corporate issuance weighed on Tsy sentiment during US trade, while data was mixed.
• US-JP yield differentials have ticked higher, although the 10yr sits just shy of earlier Feb highs near +359bps.
• A break above 150.89 we likely increase focus on intervention risks from the authorities, who have kept a steady drum beat on verbal rhetoric around FX markets in recent weeks.
• Locally today on the data front we have national CPI for Jan out. Headline is expected to dip to 1.9% y/y, from 2.6%. Core, ex fresh food and energy is expected at 3. % from 3.7%.
• In the option expiry space, note the following for NY cut later on Tuesday: 150.00 (1.2bn), 150.20 (696mln), 151.00 (782mln).